Fresh protests approaching

04 June 2013

With the grassroots Tamarod movement gaining popularity and widespread demonstrations scheduled to take place on 30 June, a further spell of violent protests looms for Egypt

Across Egypt, people are filling in petition forms, eager to make their stand against President Mohamed Mursi and call for presidential elections to be brought forward.

A grassroots movement called Tamarod (Rebellion) is quickly spreading through the North African country. Some 6 or 7 million signatures are said to have been collected already, with the campaign aiming to reach 15 million before the end of June. If this target is achieved, it would exceed the number of Egyptians who voted Mursi into power last June.

Planned protest

The founders of the campaign intend to present their petition to the government in protests planned for 30 June. They hope the public display of no confidence in Mursi will force him to announce early presidential elections.

Yet, so far Mursi’s government has dismissed the campaign, with the idea that a government can be overthrown by a petition deemed as “unconstitutional” by his Freedom and Justice Party.

Mohamed Beltagy, a member of the party’s executive bureau, said in May that the campaign was “illogical” and undermines the concept of democracy. “I call on the campaign’s organisers to transform the millions of participants they’re talking about in a democratic framework, into a political party that pulls them all together,” he said. “Thus far, the campaign is no more than a public survey.”

Revolutionary tool or not, the Tamarod campaign clearly demonstrates the general population’s entrenched resentment with Mursi – discontent that has the potential to bubble up into something far more destructive and violent.

“The movement definitely shows that the government is losing popularity by the minute,” says Hany Genena, head of research at Pharos Securities Brokerage in Cairo. “It is losing popularity with the average man in the street.”

Supporters of the Tamarod campaign are diverse. Well-known Egyptian poets, journalists, TV presenters and even couples celebrating their wedding are posting pictures of themselves on social media websites signing Tamarod petitions.

The movement has a dedicated website with printable petition forms that categorically condemn the Mursi government. It lists what it sees as the key failings of his presidency, including criticism of his handling of the economy, the country’s reliance on external loans, the government’s relationship with the US and Egypt’s deteriorating security situation.

Campaigners have a divergent range of complaints against Mursi, but the overarching theme that unites the protesters and the general population is the lack of confidence in the president’s ability to tackle Egypt’s many problems.

“We know, as Egyptians, there are fundamental problems that are not his fault entirely, but we are angry because he gets the worst out of us by his actions,” says Genena. “He is not communicating how he will solve the problem and that makes things worse and increases a sense of uncertainty among both the business community and the man in the street.”

Mursi’s failures are increasingly evident. The security situation in Egypt is worsening and there are daily power outages. The import-dependent country is also running low on the foreign exchange funds needed to secure fuel and food.

Since the 2011 revolution, the nation’s foreign exchange reserves have fallen by 60 per cent and the value of the Egyptian pound has plummeted. The budget deficit is likely to widen to 11.7 per cent of economic output by the end of May.

The failing economy has resulted in public opinion of Mursi hitting at an all-time low. According to a poll conducted by the Egyptian Centre for Public Opinion Research in April, less than one-third of Egyptians would vote for Mursi if presidential elections were held tomorrow.

Economic woes

Many complain that Mursi has done little in his first year as president to reform the economy, and has instead opted for short-term stop gap solutions.

The government has passed a sharia finance law to allow the issuance of Islamic bonds or sukuk as a means of raising financing.  However, there is little foreign investor appetite for Egyptian bonds.

At the end of May, the government outlined a $12bn bond issuance plan, being arranged by Qatar’s QNB Capital and the UK’s HSBC. A banker from US Citigroup says the liquidity in the sukuk market will not make investors ignore the poor underlying credit quality in Egypt. He believes that with the country still locked out of international markets due to credit worries, a successful sukuk issuance is unlikely.

The movement definitely shows that the government is losing popularity by the minute

Hany Genena, Pharos Securities Brokerage

Mursi’s government has also turned to bilateral loans. It secured funding from Libya earlier this year, and struck a deal with Qatar in which the country agreed to buy $3bn in Egyptian government bonds. However, these loans are not seen as a long-term solution to Egypt’s economic problems.

“It is just buying them time,” says Wael Ziada, managing director and head of research at Egyptian investment bank EFG Hermes.

Ziada sees Egypt’s failure to secure the much-debated $4.8bn loan from the IMF as further evidence of the government’s lack of progress in making economic reforms.

“Repeated failures to present the IMF an acceptable programme reflects the inability of the government to deal with the situation and come up with a competent economic plan that addresses the economy’s shortcomings and structural issues,” he says.

Talks with the IMF have dragged on for months and the growing consensus is that the deal will remain out of reach for some time and is unlikely before the fourth quarter.

“Given the lengthy delay and the depth of Egypt’s fiscal problems, at this point even an IMF loan is unlikely to assuage the fundamental concerns of potential investors,” says James Fallon, Middle East analyst at London-headquartered Control Risks.

Consolidating power

Mursi’s critics argue that as the economy flounders, the president has been overly preoccupied with strengthening his political position of power, as well as that of his party and the Muslim Brotherhood.

Presently, Mursi is engaged in a battle with the country’s judiciary and is accused of leading a purging of the judiciary with the intention of filling it with pro-Muslim Brotherhood judges.

In April, a bill was passed to reduce the retirement age for judges from 70 to 60 years of age. The ruling affects close to a quarter of the judiciary and led to justice minister Ahmed Mekky resigning from his position in April. The legislation was seen as an attempt to remove judges who might still be loyal to the previous regime. 

The judiciary has made some controversial rulings since Mursi came to power. In the latest episode, the Supreme Constitutional Court ruled on 2 June that Egypt’s upper house, the Shura Council, and the 100-member panel that drafted the new constitution, were improperly elected. The constitution was approved in a nationwide referendum in December.

This followed a similar ruling last year that dissolved the lower house of parliament for being illegal as political parties had fielded candidates for seats reserved for independents. Legislative powers subsequently passed first to Mursi and then to the Shura Council. In this latest instance, however, the court ruled that the Shura Council should remain in place until after fresh parliamentary elections are held.

These were originally due to take place in October, but were pushed back to April and are now postponed pending a new date. Both supporters and opponents of Mursi may find some victory in this latest ruling, but for the ordinary Egyptian it serves merely to cement frustration at the slow pace of the political transition, the in-fighting and lack of tangible improvements in living standards since Mubarak was ousted nearly two and a half years ago.

“Persistent fuel and food shortages are already leading to an increase in protests in rural areas and are unlikely to subside for at least the next six months,” says Firas Abi Ali, head of Middle East and North Africa at UK risk consultancy IHS.

The Tamarod movement is just one manifestation of the acute frustration being experienced throughout Egypt. Rural communities feel isolated and ignored by the government, while army officers are far from happy with the Muslim Brotherhood’s growing power. With widespread demonstrations scheduled to take place on 30 June, another significant bout of violent protests is potentially looming. “We see this time as the quiet before the storm,” says Genena.

Ali agrees: “Mass unrest, on a more widespread and violent scale than the uprising that led to President Mubarak’s overthrow, is now likely.”

Crowds anticipated

A Cairo-based supporter of the Tamarod campaign expects the 30 June protests to attract big crowds. “I believe the number of protesters on 30 June will be very high, due to the fact that the Tamarod campaign has been well-received and everyone knows the protests are on 30 June, something we lacked last year.”

However, he is sceptical about the movement’s ability to push Mursi into calling early elections. “I put no hope on that,” he says. “Mursi will not call for presidential elections, neither will the Muslim Brotherhood. They will not leave so easily.”

Many agree that despite the prospect of more street violence, Mursi will remain in power and the Muslim Brotherhood will retain its influence over the country. This is in part due to a lack of a united and coherent opposition to the current government.

“The Muslim Brotherhood remains the most cohesive political organisation in Egypt. Egypt’s opposition remains fragmented and disorganised,” says Fallon. But, he adds, “in aggregate, the Egyptian opposition parties are a significant and growing political force.”

The popularity of the Tamarod campaign is evidence of this growing political force. Yet, the true extent of the opposition’s influence will not become apparent until after 30 June.

Key fact

Since the 2011 revolution, Egypt’s foreign exchange reserves have fallen by 60 per cent

Source: MEED

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.